COVID relief for small businesses has expanded. Here’s what it looks like in Alaska right now.
- October 20, 2020
After months of waiting out the dark winter, Anchorage-area Airbnb hosts were ready to welcome thousands of tourists to the Alaska for weddings, vacations and cruises.
But the tourist season hasn’t come. Instead, vacation rental owners were hit with a tsunami of cancellations as the coronavirus pandemic forced political leaders to halt most travel and impose restrictions on people entering Alaska from out of state.
Over the past three years, real estate broker David Parks has built a mini Airbnb empire. It started with a unit in Bootlegger Cove and has grown to 19 properties. This spring, he’s remodeling seven more along Ship Creek.
“It’s been pretty bad,” he said. “The other day we were counting just over 700 cancellations.”
David Parks shows renovations at a downtown building that will have several AirBnB units, Thursday, April 30, 2020. (Anne Raup / ADN)
He, like others, cut his prices in hopes of getting some bookings. He’s had a bit of luck, though nothing close to his normal business.
AirBnB hosts in the Anchorage area have lost nearly all their customers as the vacation rental platform allowed penalty-free cancellations for spring bookings and Alaska Gov. Mike Dunleavy imposed a 14-day quarantine order for people entering the state.
With, relief is not in sight. Several hosts reported a need to tighten overall spending as their main or supplemental income stream dried up overnight. Additionally, money collected through the 12% tax imposed on Airbnb rentals by the municipality has taken the same hit, though the city declined to say how much revenue the platform brings. The city does not keep count of the number of Airbnb rentals in its jurisdiction.
Parks was hoping for a surge in bookings when the city and state relaxed shelter-in-place orders. So far that hasn’t happened, but he remains optimistic. Maybe travel restrictions will be lifted, he said, or hotels will remain shuttered through the summer, funneling extra business to Airbnb hosts. Alaska, with its vast space and sparse population, could become an alternative vacation destination for people who had planned trips to Europe or other crowded places, he said.
He said he’s trying to see this “shift in the market” as an opportunity: He’s willing to work with tourists to make his units safe and comfortable if they’re willing to travel.
Parks said he saw an initial hit of 70% to his business and has gotten some back, but as he continues spending on the remodel of seven downtown Anchorage units, a busy summer would be welcome.
“It’s very nerve-wracking to continue to invest in that,” he said.
Anchorage residents Christina and Bob Kelly got into the vacation rental business last summer, after buying and remodeling a South Addition duplex in April 2019.
Immediately, business took off. Then they lost all of their spring bookings overnight.
They’ve still managed to drum up some business, however.
One tourist broke an arm in Alaska right before travel restrictions were put in place, and booked one of the units when their stay was unexpectedly extended. Also, an Anchorage resident had their seasonal work outside Anchorage fall through due to the virus. Their lease was up, so they booked a long-term stay in one of the units.
Christina Kelly features cleaning products in her ad for the Airbnb unit she runs. (Screenshot)
Christina Kelly, who does all of the cleaning, runs an ozone generator to disinfect the home between guests. To highlight safety measures for potential guests, she posted a photo of the generator, Clorox wipes and Lysol spray in her Airbnb ad.
They’ve thought about trying to rent the units on one-year leases, but they still have tourists booked through summer, and they would get fined for canceling the bookings. For now, they hope to break even as they rely on income from day jobs.
“We are kind of just riding it out to see where things go,” Christina Kelly said.
Brad Allen, an Anchorage dentist with a practice in Eagle River, who rents out a cabin in Girdwood, said he’s lost $6,000 in canceled bookings, and estimates another $10,000 in new bookings compared to business in 2019.
“It’s been quite a ride,” said “I pretty much lost every booking between March 15 to the end of May.”
Allen said he usually makes about $30,000 during the busy summer months, but he isn’t counting on that this year.
“My life, personally, has been affected tremendously,” Allen said. “We’ve cut back on everything.”
So far, Airbnb is allowing customers to cancel trips until the end of May, but the company sent Allen an email this week saying that policy could be extended into June.
“Come June 1, that’s high season,” he said. “I’m able to command $215 per night.”
Allen has the means to endure such a hit. He owns his own dental practice in Eagle River, though that has also taken a massive hit as nonemergency dental procedures were postponed. The lack of business reverberates through the economy, he said: He didn’t hire contractors to upgrade the cabin this year, and the woman who cleans between guests is out of work.
To lure in some locals seeking a change of scenery during socially distant times, Allen slashed his rate in half. He’s been able to get a handful of bookings that way.
Lynne Dorran’s three rental cabins in Girdwood are her sole source of income, though her husband has a separate job. She’s found some renters, such as workers on the North Slope afraid to leave the state due to travel restrictions, but lost 80% of her revenue, she said.
She said she has customers with trips planned later in the summer who have reached out to her for guidance. She doesn’t know what to tell them.
“I guess I haven’t heard about how we are supposed to be preparing for the future,” she said. “Summer is going to start in two weeks.”
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